Genes encoding B and T cell antigen receptors are assembled by DNA recombination in somatic cells. Functional immunoglobulin heavy chain (IgH) gene assembly requires two regulated recombination events. The first juxtaposes a DH to a JH gene segment; VH gene recombination follows, with VH gene segments rearranging to the pre-formed DJH junction. We have proposed that stepwise rearrangements of DH and VH gene segments is regulated by sequential changes in chromatin structure that occur accross the locus. Studies during this fiscal year analysed the detailed chromatin structure of the DH-Cmu domain within which the first steps of recombination occur. We completed the analysis of histone modification landscape of the germline IgH locus in pro-B cells. Further investigations of low level tissue-specific transcripts in the DH region revealed that these transcripts were encoded by the "anti-sense" strand. We proposed that the inactive state of intervening DH gene segments may be maintained by an RNAi mechanism, analogous to centromeric heterochromatin in S. pombe. To confirm, or refute, this hypothesis we have taken four approaches to modulate the RNAi machinery in pro-B cells. We will evaluate the effects on strand-specific sterile transcription and VDJ recombination. We also developed a quantitative assay to measure the frequency, and usage, of DH gene segments in the first recombination event in developing B lymphocytes. This assay will be used to test whether the chromation state of the germline locus directly predicts the frequency of DH gene recombination. We also initasted collaborations to quantitate the extent, and usage, of DH gene segments in bone marrow precursors not yet committed to the B lineage. During this year we also established two new techniques in the laboratory: 1) use of bisulfite modifications to determine the extent of CpG methylation at different stages of B ell differentiation and 2) chromatin conformation capture to guage higher order structure of the IgH locus prior to, and during, V(D)J recombination. We used in-vitro chromatin assembly, together with IgH enhancer-binding proteins, to understand how regulatory proteins affect chromatin structure of the IgH locus. We obtained the first evidence for the combinatorial control of chromatin structure by enhancer binding proteins. Specifically, we found that generation of a DNase1 hypersensitive site depends on the constellation, but not the number, of proeins that bind to plasmid DNA assembled into nucleosomes. The ability of proteins to generate, or disrupt, hypersensitivity was shown to depend on specific chromatin re-modelling activities that they recruited to the template DNA. The combination of in-vivo and in-vitro analyses is expected to provide a comprehensive view of genome activation, a crucial feature of normal human development and one that is often disrupted in diseased states.